Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,609.5 in January 2002, to 1,742.7 in December 2003. The labor component of the index rose at a rapid rate while the material component rose slowly.
The labor index rose from 2,101.9 to 2,263.5 over the 2-year period, while the materials index increased 91 points, from 870.9 to 961.4.
The miscellaneous equipment index varied 10 points in the 2-year comparison. The category includes pumps and compressors, electrical equipment, heat exchangers, instrument, and engines. They are thus manufac-tured items, and their costs are a measure of manufacturing efficiency.
The Nelson-Farrar refinery operations index rose 38 points during 2002 and then varied little in the year 2003 period.
The process unit index also showed the same varied scenario during the 2-year period, starting at 448.2 and ending with 583.5.
These two indexes varied somewhat randomly, increasing for 2002 and then varying during the year 2003. Changes in the cost of refinery fuel accounted for much of the oscillation.
Continuing increases in refinery operating efficiency helped stabilize values of both indexes.
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The cost indexes may be used to convert prices at any date to prices at other dates by ratios to the cost indexes of the same date. Item indexes are published each quarter (first week issue of January, April, July, and October). In addition the Nelson Construction and Operating Cost Indexes are published in the first issue of each month of The Oil and Gas Journal.
